FOREX/BONDS-Swiss franc falls against euro on Brexit relief, dollar dips on U.S. stimulus

* Swiss franc falls to 7-month low against euro
* U.S. shutdown averted as Trump signs COVID-19 aid bill
* Sterling hovers near 2 1/2-year high
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(The London-based euro zone government bonds report will be
combined with the London-based Forex report this week)
By Yoruk Bahceli
AMSTERDAM, Dec 28 (Reuters) - The Swiss franc fell to its
lowest in nearly seven months against the euro on Monday as the
Brexit trade deal remained in focus, while the dollar dipped
after U.S. President Donald Trump signed a COVID-19 aid bill,
averting a government shutdown.
The Swiss franc fell 0.3% to 1.08860 against the euro, its
lowest since June 8. It was unchanged against the U.S. dollar at
88.835 cents at 0903 GMT. CHF=EBS
"What we are seeing is a continuation of the pricing out of
hard Brexit risk," said Ulrich Leuchtmann, head of FX research
at Commerzbank in Frankfurt.
"I think a lot of market participants saw Swissie as an
alternative to the euro, (which) would have been harder affected
by a hard Brexit," he said. Investors were likely to close out
of such positions in the following sessions, he added.
The euro was up 0.1% $1.22370 EUR=EBS , near the 2 1/2-year
high of $1.2273 touched this month.
In the United States, Trump signed into law a $2.3 trillion
pandemic aid and spending package, averting a partial federal
government shutdown that would have started on Tuesday.
The dollar dipped 0.3% against a basket of currencies to
90.031, its lowest in a week. DXY=
The boost to risk appetite also hurt safe-haven government
bonds, with 10-year U.S. Treasury yields up 2 basis points at
0.95%. US10YT=RR . Germany's benchmark 10-year yield was
unchanged at -0.55%. DE10YT=RR
Meanwhile, Britain's sterling added 0.1% against the U.S.
dollar to $1.3551 GBP= , continuing to keep in sight the
$1.3625 mark it hit earlier this month for the first time since
May 2018.
It neared that level on Thursday, when Britain and the EU
announced the trade deal.
The pound was down 0.5% against the euro at 90.280 pence.
EURGBP=D3
"Markets are likely to wait until next week though before
buying (sterling) again, fearful of massive bottlenecks at the
English Channel as the new rules take effect," Jeffrey Haley,
senior market analyst at OANDA told clients.
While the deal came as a relief to investors, the bare-bones
nature of the pact leaves Britain far more detached from the EU,
analysts say, suggesting any subsequent gains will be modest and
the discount that has dogged UK assets since 2016 will not
vanish soon. Brussels has made no decision yet on whether to grant
Britain access to the bloc's financial market. Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in
Tokyo, expects the pound and euro to decline against the dollar,
reaching $1.30 and $1.15 respectively by the end of the summer.
The Australian dollar, a trade sensitive currency, inched up
to 76.110 U.S. cents, toward the 2 1/2-year high of 76.390
reached this month. AUD=D3
Yields on 10-year Southern European bonds - deemed riskier
due to their lower credit ratings - dipped 2-3 basis points.
IT10YT=RR ES10YT=RR PT10YT=RR
The yuan crept up after China's central bank lifted its
official guidance level to the highest in 30 months
to as high as 6.5280 against the dollar in the
onshore market, but was last unchanged at 6.5408. CNY=CFXS
It was last down 0.3% in the offshore market at 6.5311.
CNH=EBS
The yen rose slightly against the dollar, up 0.1% at
103.455. JPY=EBS .
Policymakers at Japan's central were divided on how far they
should go in examining yield curve control with some calling for
a comprehensive review of the framework, a summary of opinions
voiced at the December rate review showed on Monday.